A few years ago I was invited by a friend for lunch. We agreed to meet at the lobby of ‘Intercontinental’ and then decide on the restaurant. When we did not see each other in the lobby at the appointed hour he called me to enquire where I was. ‘In the lobby of Intercontinental,’ I said. ’But I am in the lobby too and I don’t see you anywhere,’ he said.
As it turned out, we were waiting in the lobbies of two different hotels! By mistake I was at The Oberoi- and he was at the actual, then Lalit Intercontinental. In my defense, Oberoi had been Hotel Oberoi Intercontinental for decades after opening in Delhi in 1965 and many locals like me still think of it as the InterContinental. After the contract expired, Intercontinental had moved away and married The Lalit, which was a short term affair but the hotel where we were supposed to meet on that day. The partnership shifted to Hotel Eros in Nehru Place, which was even a shorter term alliance, barely lasting the honeymoon period. Now only one property on Marine Drive in Mumbai keeps its flag flying in India.
Therefore, I was quite perplexed when I came to know that Mr. Pascal Gauvin, COO, InterContinental Hotels Group (IHG) for India, Middle East and Africa, said that despite the current challenges faced by the hospitality industry the group planned to scale up its presence in the country. The detailed interview with him in Business India does make it clear that IHG will not push the luxury label Intercontinental. ‘We will have InterContinental hotels in Mumbai or Delhi but that is not critical for us. This is for the international traveler who is not our target customer,’ he reported says.
IHG plans to expand mostly in the mid segment range with Holiday Inn and Holiday Inn Express - InterContinental and Crowne Plaza are the other two higher end hotel brands that are a part of the bouquet of Nine which belong to the Group. The corporation is planning to open at least 150 hotels in India over the next 10 to 15 years- 85% are expected to be in the growing middle-class segment, targeting domestic clients who are increasingly traveling within India.
Holiday Inn is the largest brand in the US and the world, says Pascal. It is the full service brand whereas Holiday Inn Express is a select-service brand. It is simple, efficient with limited service, Wi-Fi, good shower and is very effective at a value-for-money price point. In India a restaurant is also added on the side because of such requirement. But for people who need full service including room service and all the other comforts, the Holiday Inn brand will be built.
A recent study by the Group indicated that travelers- international and domestic-list three most important factors - a global brand for reliability and trust, localization which implies Indian food and personalized services, which is a different and quite a new discovery. IHG plans to strategize with full consideration of these factors.
‘We want to build in India a network of Holiday Inn and Holiday Inn Express where people can travel across India in many cities and use this brand everywhere they can. We will go to every city where the airlines are landing or if there is a big network of trains we will go to that city. India is such an amazing and huge country we have to cover it,' he says as reported in Business India
Explaining the reasons for not having many Intercontinental or Crowne Plazas in India, he says that India is a huge market with a billion plus people. It is not about selling this destination as a luxury and then expanding. Demography shows that more people will move from poverty to mid class level. The economy is growing and people will need to travel within India to do business. When one counts the number of rooms today against the number of rooms needed tomorrow it is not enough. Luxury is already present with the Taj and the Oberoi which is mainly for the international traveler. Therefore, the company is bullish about the mid-sector hotels.
Good for the IHG and good for the consumer-but not great for the sale or consumption of wine through this expansion strategy. Bigger 4 and 5–star hotels buy and potentially sell more wine. No such results may be expected from this sector,especially in the Holiday Inn Express where the IHG expects the maximum push.
The company philosophy is summed up by Gauvin when he says, ‘we are in a different thinking. We do not want to go in for the international traveler but the domestic traveler.’ So get ready to see more road signs for Holiday Inn in India and even more of Holiday Inn Express hotels.
Tags: InterContinental Hotels Group, IHG, Pascal Gauvin, Holiday Inn Express, Holiday Inn